Advocacy

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Published on Friday, November 9, 2012

The fiscal cliff

With the elections (mostly) over, attention at the federal level is turning toward the looming “fiscal cliff” of $1.2 trillion in across-the-board cuts to defense and domestic programs if Congress does not act by early January.

How did we get here?

The threat of significant across-the-board cuts, called sequestration, is the product of the 2011 Budget Control Act, which passed after a Congressional fight over the federal debt ceiling and the budget deficit. The Budget Control Act established a bipartisan “Super Committee” to identify and agree on specific federal programs to cut. Sequestration was the hammer designed to force consensus by the November 2011 deadline. When the Super Committee did not reach agreement, it triggered mandatory across-the-board cuts over the next 10 years. Unless Congress repeals or delays these provisions, sequestration takes effect on January 2, 2013.

What does this mean for Washington cities?

Many of the programs cities rely on will likely face major cuts if sequestration is not averted, such as Community Development Block Grants (CDBG) and Community Oriented Policing Services (COPS). Perhaps even more daunting is that some predict sequestration could push the country back into a recession. NLC has highlighted some of the very significant economic impacts if the automatic spending cuts are allowed to take place:

Reducing the nation’s GDP by $215 billion

Decreasing personal earnings of the workforce by $109.4 billion

Costing the U.S. economy (and cities) 2.14 million jobs

Reducing GDP growth in 2013 by two-thirds

Increasing unemployment by as much as 1.5 percentage points, raising the current national rate above 9%.

With Washington’s strong military installations and related industries, we will likely feel an even greater impact than other states. A George Mason University report estimates a loss of nearly 42,000 defense and non-defense jobs in Washington State.

What can you do?

Please contact your members of Congress and ask them to repeal or delay sequestration. Tell them you understand tough fiscal choices need to be made, but across-the-board cuts will be detrimental to our economy.